As Bloomberg said, Buffett is an early indicator, not a timing indicator. No wonder, look at the market: Risk On is booming, so it’s just a matter of time until inflation does come back, IMO.
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1Lun
@Robinhodl Have you thought of a strategy about this?
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@demoenigma I am not totally sure; I am kind of confused by the bond market. Normally, it reflects economic expectations much better, but currently, the bond market is not pricing in any inflationary pressure on the long end (US10Y - US20Y). However, I am keeping an eye on the yield spread between the long end and the short end of US government bonds.
The thing is, the stock market can remain irrational for way longer than you might expect. I think the stock market has indirectly priced in inflation but under a different narrative—it’s doing the right thing for the wrong reason.
It looks like Trump is doing what he promised, and I am totally convinced that his plan will create inflationary pressure. The oil stimulation alone is far from enough to counteract that. I also think the stock market will rise even more because of the strong job market and the robust financial health of consumers, at least in the US. This asset inflation adds further inflationary pressure.
If you have no idea what I’m talking about, I would strongly recommend learning the logic of the bond market, liquidity, and money psychology. These can somewhat predict the more interesting markets like stocks and crypto.
The thing is, the stock market can remain irrational for way longer than you might expect. I think the stock market has indirectly priced in inflation but under a different narrative—it’s doing the right thing for the wrong reason.
It looks like Trump is doing what he promised, and I am totally convinced that his plan will create inflationary pressure. The oil stimulation alone is far from enough to counteract that. I also think the stock market will rise even more because of the strong job market and the robust financial health of consumers, at least in the US. This asset inflation adds further inflationary pressure.
If you have no idea what I’m talking about, I would strongly recommend learning the logic of the bond market, liquidity, and money psychology. These can somewhat predict the more interesting markets like stocks and crypto.
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•@Robinhodl I have not considered potential catalysts in the above, and I am currently still in the thinking phase.
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